Shared Ownership

Benefits

  • It helps you get that all-important first foot on the property ladder.
  • It enables you to buy a bigger property than you would otherwise be able to afford.
  • Your combined monthly rent and mortgage repayment may be less than if you had bought the property outright.
  • You will be exempt from paying stamp duty if the share you are buying is worth less than the lowest stamp duty threshold and may receive tax relief anyway – depending on the development.
  • It is an investment, allowing you to receive a share of the increase in the value of the property should you sell.
  • You can build up the share of the property you own until you own it outright, thus investing in your own home rather than just paying rent.

What is involved with a shared ownership scheme?

Shared ownership is where you buy part of a property and rent the rest from a landlord, usually a housing association or housing trust. The properties have usually either been renovated or built by them. The schemes are usually funded by the government through the Departnemnt of Homes and Communities or local authorities.

Under a shared ownership scheme you buy a share of a home with a mortgage or savings, normally around 25% to 75%, and pay a subsidised rent on the part you don’t own.

Those organisations registered with the Department of Homes and Communities, which funds the homes they build with money from central government, are known as registered social landlord (RSLs).

Some RSLs offer non-government-funded schemes, which run along the same lines, as do some house builders and building societies.

Who can apply?

Shared ownership is intended for people on lower incomes who cannot afford to buy a home of their own at current market prices. You should be a key worker, in housing need or have a household income of £60,000 or less.

To be eligible for some schemes (not all) you must be able to prove that you have a housing need and are unable to afford to buy a property in any other way. The landlords running the schemes will consider what money you have coming in and whether you have children, for example, which will affect your housing need.